The number of registered investment advisors grew 5.6% as of April 2008 over the year-earlier period, maintaining the steady growth pace during most of this decade (excluding aberrations from the prior two years related to hedge fund RIAs).

According to a report issued this week by the Investment Adviser Association and National Regulatory Services, there were 11,030 investment advisors registered with the Securities and Exchange Commission as of April, representing a 5.6% gain. Total assets under management at all RIA firms jumped 12.3%, to a record high of $42.3 trillion.

Annual increases in the number of RIAs rose between 3.5% and 5.7% in the years from 2001-2002 to 2004-2005. That ballooned to a 19.4% increase in 2005-2006 after the SEC adopted a rule in 2004 that required certain hedge fund advisors to register with the agency. That rule was invalidated by a court case in 2006, explaining the undersized 1.5% increase in new RIAs in 2006-2007, says David Tittsworth, executive director of the Investment Adviser Association.

Tittsworth speculates that much of the gain in the RIA ranks in recent years has been fueled by advisors jumping ship from the major wirehouse companies.

Bing Waldert, an analyst with Cerulli Associates, says the total number of financial advisors in the industry dropped at an annual rate of just under 1% during the past three years. That's primarily due to the shrinking number of advisors at wirehouses, insurance brokers and broker-dealers.

"The one channel seeing growth is in RIAs," he says.